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Citrus Playa Macenas S.L. Compulsory Insolvency

Dear Sir/Madam,

We are writing to you in respect to the Playa Macenas and Turre cases, and the proposed way forward, in view that Citrus Playa Macenas S.L. director refuses to assist in identifying the diverse transfers.

It has now been over a year since we decided to take on the first cases to Court against Bankia (formerly Bancaja), based on their documented undertaking to provide individual bank guarantees to property buyers. At the time when the investments were formalized, Bancaja was run by a branch manager called Jose Enrique Chasserot. This individual was partly responsible for convincing a number of claimants that indeed, their deposits would be safe as Bancaja had provided a general or collective bank guarantee on the back of which, individual guarantees would be issued.

Mr. Chasserot, who no longer works for Bankia, is nonetheless in the banking industry and now works for Caixa Catalunya, in Marbella, as Vice-branch manager. We have approached him at this offices but he has vehemently refused to have anything to do with this matter, to the point of being rude to us when we personally asked to have a meeting with him. In our opinion, his volatile and unprofessional manners with us only prove that he is extremely uncomfortable with the case. In fact, he confided to a colleague that the bank should not be responsible for a “speculative investment that went wrong” and that off-plan property buyers should have known what they were getting themselves into (a case of a man in the wrong business, clearly).

In spite of the above, some headway has been achieved: Bankia has responded positively to 2 formal letters we sent demanding that they take up responsibility under Act 57/1968, accepting to look at the cases. To attain this, the bank has requested from us that we prove that funds were effectively transferred to Citrus Playa Macenas S.L. account with Bankia which, though not being a legal requirement to cash the bank guarantees, as varied case law has pointed out, is one condition the bank is imposing.

A second condition by Bancaja to proceed with studying a claim on the guarantees is a list of the individual purchasers, the sums paid to Citrus and the dates.

While we are able to contest condition number 1 we are not able to provide with a list of buyers and their deposits since most of these were actually sent to UK bank accounts, controlled by Richard John Day, Ray Warren and or/Colin Patrick Francis-Smith. And it is at this juncture where we become unstuck and have requested collaboration.

Unfortunately Ray Warren, current director of Citrus Playa Macenas S.L. following the resignation of Colin Patrick Francis-Smith and Richard John Day, has consistently refused to assist us in identifying the transferors and amounts of the deposits they received for 2 failed developments on grounds that some postings were negatively affecting new business ventures that Mr. Day was trying to get into.

As an example of Mr. Warren’s refusal to assist in the endeavours to force Bankia to repay -himself a former solicitor in England and Wales-, we can quote him initially denied having received a transfer of over 200 thousand Euros that we had sent to the Vera branch account, only to later changed his version to accommodate a more extraordinary one: the account opened with Bancaja did not exist when the transfer was made. Our firm has a copy of this transfer made from our clients account and a certificate from Banesto, confirming the remittance of the sum; we also have Mr. Warren’s emails confirming both versions.

In our professional opinion, the situation is therefore as follows:

- Citrus Playa Macenas S.L., through its director Raymond Harold Warren, is avoiding a legitimate, lawful and obligatory request by its existing clients to confirm the receipt of funds on the basis of a number of excuses, namely that some reputation-damaging information pertaining to this case is to be taken down from a blog post.

- According to Mr. Warren and Mr. Day, this unilateral condition had to be met before he agreed to assist his customers, notwithstanding his mandatory obligation to do, in his capacity as company director. As gesture of good faith, this was complied with some months back and his name was erased from the blog post. Unfortunately, a new request was then made to having the whole of the Playa Macenas S.L. blog removed.

- Mr. Warren keeps negating the assistance that has been requested from him numerous times; in addition to this refusal to help, he has chosen to place the blame on third parties (ourselves mainly), recommending some customers that they change to other lawyers he has become acquainted with.

- Our options are now limited to filing a motion with the Almeria Mercantile Courts to have Citrus Playa Macenas S.L. forced in compulsory liquidation, with the aim of having the Courts appoint administrators (paid for by a Government fund established for the purpose) whose main job will be to determine the whereabouts of the deposits, their lawful owners, the culpability of the company directors in producing the result of total loss and their personal liability towards creditors for failing to file timely for insolvency.

- Of the 100 or so deposits paid to the Citrus Group of companies, only circa €950,000 of this money went to pay for the acquisition of the land, which we know of. There is approximately between €5 and €7,000,000 of clients’ money that is unaccounted for. In all likelihood, Mr. Warren’s version will contradict this forcefully and as we have seen before, he will puzzlingly crunch some numbers on an email with the hope of putting investor’s minds at rest as to the use given to several million Euros received by bona fide investors.

When can the situation of insolvency be deemed to have been caused fraudulently?

Any of the following scenarios will be deemed as definitive evidence that insolvency has been caused culpably:

• Serious non-fulfillment of accountancy obligations, double accounting or relevant irregularities.
• Falsification or inaccuracy in the documents which accompany the voluntary insolvency petition (similar to a CAV (Company Voluntary Arrangement).
• Breach of agreement with creditors.
• Hiding of assets in order to prevent creditors’ satisfaction.
• Fraudulent removal of assets from the company prior to declaring it insolvent.
• Simulation or false corporate balance through judicial mechanisms.

And in the following scenarios, culpable insolvency is presumed although may be legally challenged:

• Failure to lodge voluntary insolvency proceedings.
• Failure to collaborate with the Courts dealing with the insolvency.
• Failure to file annual accounts with the Companies House.

What are the consequences of a declaration of culpability?

The consequences of a judicial declaration of culpable insolvency can range from criminal indictment, if it is proven that funds were misappropriated by the directors, disqualification to hold directorship posts between 5 and 20 years, an unlimited personal liability of directors to repay all creditors that have not received satisfaction via insolvency proceedings and the obligation of directors and/or shareholders that received loans from the company.

Recently too, a Court ruling in Barcelona determined that directors who failed to provide bank guarantees were in breach of their “corporate” obligations towards their creditors, and have been order to repay a deposit to a customer without even having to pursue the route of the insolvency.

Within the insolvency proceedings, Bankia will also have to disclose the bank guarantee that was issued and whether any customer has ever been paid.

How can property buyers benefit from this?

The Court appointed administrators will offer any person that can prove having paid to Citrus Playa Macenas S.L. or associated companies/individuals, or having a credit against any of those companies, the possibility of joining the proceedings. It is a statutory obligation for Citrus Playa Macenas S.L. to have a full list of those clients too, with indication of the sums they have paid (example). Our firm will be able to assist the administrators, as we have most of this information too.

The main aim of this action is to have all deposits that were paid, with their legitimate owners, identified by the Courts to assist them in claiming from Bankia.

Additionally, director(s) will be requested to provide a full, unqualified, precise and accurate explanation as to the whereabouts of the deposits.

How soon can this be instigated?

As we already have Power of Attorney for a number of customers, we can instigate compulsory insolvency proceedings petition within the next 4 weeks. At a later stage, anyone will be able to register their credit with the Courts.

Finally, we have set up a public thread where anyone can publish comments or queries (anonymously too), which we will respond promptly too.